WEBVTT 00:00.366 --> 00:02.166 align:left position:17.5% line:89% size:72.5% - Next on "Energy Switch," 00:02.166 --> 00:04.266 align:left position:25% line:83% size:65% we'll discuss whether the US should support 00:04.266 --> 00:07.333 align:left position:25% line:83% size:65% or move away from its oil and gas industry. 00:07.333 --> 00:10.400 align:left position:15% line:89% size:75% How affordable is oil and gas 00:10.400 --> 00:12.366 align:left position:10% line:89% size:80% as an economic multiplier today? 00:12.366 --> 00:14.900 align:left position:22.5% line:83% size:67.5% - Our lifting costs, or the cost of bringing oil 00:14.900 --> 00:16.633 align:left position:25% line:83% size:65% out of the ground or gas out of the ground 00:16.633 --> 00:19.033 align:left position:22.5% line:83% size:67.5% tend to be higher than the lowest-cost producers 00:19.033 --> 00:19.966 align:left position:35% line:89% size:55% in the world. 00:19.966 --> 00:21.800 align:left position:27.5% line:83% size:62.5% That's bad news for the US oil industry 00:21.800 --> 00:22.866 align:left position:20% line:89% size:70% looking into the future. 00:22.866 --> 00:24.766 align:left position:32.5% line:83% size:57.5% - Not all jobs are created equal. 00:24.766 --> 00:27.233 align:left position:30% line:83% size:60% One thing you get from a US barrel 00:27.233 --> 00:30.500 align:left position:25% line:83% size:65% is that known product of the employee base 00:30.500 --> 00:33.500 align:left position:17.5% line:83% size:72.5% because of the requirements that we have on safety, 00:33.500 --> 00:36.033 align:left position:25% line:83% size:65% and we should compare that to a global product. 00:36.033 --> 00:37.800 align:left position:30% line:83% size:60% [Scott] Coming up on "Energy Switch," 00:37.800 --> 00:41.100 align:left position:17.5% line:83% size:72.5% does the US need a thriving oil and gas industry? 00:42.066 --> 00:43.666 align:left position:22.5% line:83% size:67.5% [Announcer] Funding for "Energy Switch" 00:43.666 --> 00:45.433 align:left position:22.5% line:89% size:67.5% was provided in part by 00:45.433 --> 00:47.033 align:left position:40% line:89% size:50% Microsoft 00:47.033 --> 00:50.366 align:left position:27.5% line:83% size:62.5% and The University of Texas at Austin. 00:53.100 --> 00:54.233 align:left position:27.5% line:89% size:62.5% - I'm Scott Tinker 00:54.233 --> 00:56.233 align:left position:15% line:89% size:75% and I'm an energy scientist. 00:56.233 --> 00:58.033 align:left position:25% line:89% size:65% I work in the field, 00:58.033 --> 00:59.166 align:left position:32.5% line:89% size:57.5% lead research, 00:59.166 --> 01:00.800 align:left position:22.5% line:89% size:67.5% speak around the world, 01:00.800 --> 01:02.066 align:left position:32.5% line:89% size:57.5% write articles 01:02.066 --> 01:04.200 align:left position:15% line:89% size:75% and make films about energy. 01:05.000 --> 01:07.366 align:left position:30% line:83% size:60% This show brings together leading experts 01:07.366 --> 01:10.733 align:left position:27.5% line:83% size:62.5% on vital topics in energy and climate. 01:10.733 --> 01:12.400 align:left position:35% line:83% size:55% They may have different perspectives, 01:12.400 --> 01:15.566 align:left position:30% line:83% size:60% but my goal is to learn and illuminate 01:15.566 --> 01:18.933 align:left position:20% line:83% size:70% and bring diverging views together towards solutions. 01:19.733 --> 01:22.033 align:left position:12.5% line:89% size:77.5% Welcome to the "Energy Switch." 01:23.533 --> 01:26.433 align:left position:20% line:83% size:70% The US is now the largest producer of oil and gas 01:26.433 --> 01:27.633 align:left position:35% line:89% size:55% in the world. 01:27.633 --> 01:30.666 align:left position:20% line:83% size:70% We'll talk about its many benefits to US jobs, 01:30.666 --> 01:32.566 align:left position:20% line:89% size:70% industry and the economy, 01:32.566 --> 01:36.566 align:left position:20% line:83% size:70% and we'll talk about its challenges in CO2 emissions, 01:36.566 --> 01:39.766 align:left position:17.5% line:83% size:72.5% in transitioning itself to become a lower carbon business, 01:39.766 --> 01:42.466 align:left position:25% line:83% size:65% and to transition to energy alternatives, 01:42.466 --> 01:44.533 align:left position:25% line:83% size:65% and the difficulties that may pose 01:44.533 --> 01:47.866 align:left position:12.5% line:83% size:77.5% to the communities that depend on the oil and gas industry. 01:47.866 --> 01:49.400 align:left position:27.5% line:89% size:62.5% My guests today are 01:49.400 --> 01:50.633 align:left position:30% line:89% size:60% Dr. David Victor 01:50.633 --> 01:54.033 align:left position:15% line:83% size:75% is a professor in the School of Global Policy and Strategy 01:54.033 --> 01:57.300 align:left position:17.5% line:83% size:72.5% and co-director of the Deep Decarbonization Initiative 01:57.300 --> 02:01.966 align:left position:12.5% line:83% size:77.5% at UC San Diego and a Brookings Institute senior fellow. 02:01.966 --> 02:05.600 align:left position:15% line:83% size:75% Matt Gallagher is the former CEO of Parsley Energy, 02:05.600 --> 02:08.466 align:left position:27.5% line:83% size:62.5% founder and CEO of GreenLake Energy Ventures, 02:08.466 --> 02:11.600 align:left position:25% line:83% size:65% and a venture partner with NGP Energy Capital. 02:12.200 --> 02:14.500 align:left position:27.5% line:83% size:62.5% On this episode of "Energy Switch," 02:14.500 --> 02:17.600 align:left position:17.5% line:83% size:72.5% does the US need a thriving oil and gas industry? 02:18.033 --> 02:20.300 align:left position:12.5% line:89% size:77.5% Let's just dive right into it. 02:20.300 --> 02:22.266 align:left position:22.5% line:83% size:67.5% We're gonna look at the economic benefits and challenges 02:22.266 --> 02:23.200 align:left position:32.5% line:89% size:57.5% to begin with. 02:23.200 --> 02:27.766 align:left position:30% line:83% size:60% So, you know, how affordable is oil and gas 02:27.766 --> 02:30.266 align:left position:10% line:89% size:80% as an economic multiplier today? 02:30.266 --> 02:32.966 align:left position:20% line:83% size:70% - Well, oil and gas today is extremely affordable. 02:32.966 --> 02:35.333 align:left position:27.5% line:83% size:62.5% That's why they are dominant energy sources. 02:35.333 --> 02:37.666 align:left position:20% line:83% size:70% That's why oil is in the transportation system. 02:37.666 --> 02:39.866 align:left position:27.5% line:83% size:62.5% Natural gas plays a critical role in heating, 02:39.866 --> 02:41.366 align:left position:15% line:89% size:75% in the electric power system. 02:41.366 --> 02:43.000 align:left position:27.5% line:83% size:62.5% I think one of the challenges going forward 02:43.000 --> 02:46.066 align:left position:27.5% line:83% size:62.5% is how do you keep energy sources affordable 02:46.066 --> 02:47.766 align:left position:22.5% line:83% size:67.5% while also dealing with other kinds of challenges 02:47.766 --> 02:49.266 align:left position:15% line:89% size:75% in particular climate change? 02:49.266 --> 02:50.100 align:left position:40% line:89% size:50% - Right. 02:50.100 --> 02:52.300 align:left position:30% line:83% size:60% - I like the word economic multiplier. 02:52.300 --> 02:55.533 align:left position:12.5% line:83% size:77.5% We've really seen a renaissance in industrial capacity 02:55.533 --> 02:57.766 align:left position:35% line:83% size:55% over the last decade in the US. 02:57.766 --> 03:01.433 align:left position:25% line:83% size:65% A lot of that due to affordable, reliable energy, 03:01.433 --> 03:03.000 align:left position:22.5% line:89% size:67.5% reshoring a lot of them 03:03.000 --> 03:08.166 align:left position:17.5% line:83% size:72.5% and being able to navigate this global economy right now. 03:08.166 --> 03:09.466 align:left position:17.5% line:89% size:72.5% - The oil and gas industry 03:09.466 --> 03:12.033 align:left position:15% line:83% size:75% are doing a lot of different things in the economy. 03:12.033 --> 03:14.700 align:left position:30% line:83% size:60% They're providing fundamentally raw energy, 03:14.700 --> 03:16.533 align:left position:22.5% line:83% size:67.5% which is then used for moving things around, 03:16.533 --> 03:18.466 align:left position:30% line:83% size:60% for illumination, for heat and so on. 03:18.466 --> 03:20.066 align:left position:25% line:83% size:65% And then they're also providing the raw materials 03:20.066 --> 03:22.366 align:left position:30% line:83% size:60% for the petroleum chemical industry. 03:22.366 --> 03:23.866 align:left position:17.5% line:83% size:72.5% There's really interesting series of studies 03:23.866 --> 03:27.266 align:left position:15% line:83% size:75% that the International Energy Agency released last year 03:27.266 --> 03:29.033 align:left position:27.5% line:83% size:62.5% that looked at the future at what happens 03:29.033 --> 03:31.166 align:left position:20% line:83% size:70% if we were to essentially eliminate emissions 03:31.166 --> 03:34.266 align:left position:15% line:83% size:75% of greenhouse gases over the course of the next few decades. 03:34.266 --> 03:35.666 align:left position:22.5% line:83% size:67.5% What happens in the oil industry's really interesting, 03:35.666 --> 03:39.233 align:left position:20% line:83% size:70% is it shrinks globally by a factor of five, roughly. 03:39.233 --> 03:41.433 align:left position:22.5% line:83% size:67.5% What's left over is the portion of the industry 03:41.433 --> 03:43.933 align:left position:27.5% line:83% size:62.5% that really has no easy substitutes, 03:43.933 --> 03:46.500 align:left position:15% line:83% size:75% which is plastics, petroleum chemicals, pet chem. 03:46.500 --> 03:48.333 align:left position:40% line:83% size:50% - Right. - And so I think that's... 03:48.333 --> 03:50.166 align:left position:25% line:83% size:65% We have to have some kind of strategy 03:50.166 --> 03:52.866 align:left position:27.5% line:83% size:62.5% that retains those kinds of functions, 03:52.866 --> 03:55.566 align:left position:20% line:83% size:70% but then also recognizes for a lot of other areas, 03:55.566 --> 03:56.966 align:left position:15% line:89% size:75% oil and gas are not exclusive 03:56.966 --> 03:58.600 align:left position:30% line:83% size:60% in their capacity to provide that. 03:58.600 --> 04:00.233 align:left position:17.5% line:83% size:72.5% And I think in particular, we have to grapple 04:00.233 --> 04:02.266 align:left position:25% line:83% size:65% with the trade offs, obviously about climate change 04:02.266 --> 04:03.900 align:left position:20% line:83% size:70% and emissions associated with climate change 04:03.900 --> 04:05.733 align:left position:10% line:89% size:80% while taking not just seriously, 04:05.733 --> 04:07.266 align:left position:15% line:89% size:75% but putting front and center 04:07.266 --> 04:09.966 align:left position:27.5% line:83% size:62.5% that this industry today produces, 04:09.966 --> 04:12.633 align:left position:17.5% line:83% size:72.5% depending on how you count, several hundred thousand jobs 04:12.633 --> 04:16.000 align:left position:15% line:83% size:75% for Americans that are, many of them, well paying jobs. 04:16.000 --> 04:17.733 align:left position:27.5% line:83% size:62.5% I think one of the things we as a country 04:17.733 --> 04:20.166 align:left position:22.5% line:83% size:67.5% have not really done as well as other countries 04:20.166 --> 04:23.900 align:left position:20% line:83% size:70% is figure out how to help people who are doing one job, 04:23.900 --> 04:25.433 align:left position:27.5% line:89% size:62.5% do a different job. 04:25.433 --> 04:27.400 align:left position:10% line:89% size:80% 'Cause if we don't do that well, 04:27.400 --> 04:29.933 align:left position:20% line:83% size:70% then the transitions that we're gonna be talking about 04:29.933 --> 04:32.066 align:left position:17.5% line:83% size:72.5% those transitions are gonna be very, very painful. 04:32.066 --> 04:32.900 align:left position:42.5% line:89% size:47.5% - Yeah. 04:32.900 --> 04:35.800 align:left position:17.5% line:89% size:72.5% And may get some pushback. 04:35.800 --> 04:38.666 align:left position:15% line:83% size:75% - Not may, I think guaranteed we'll get political pushback. 04:38.666 --> 04:40.300 align:left position:12.5% line:89% size:77.5% And then frankly, this country, 04:40.300 --> 04:41.966 align:left position:25% line:83% size:65% that's a disadvantage to this country 04:41.966 --> 04:45.466 align:left position:15% line:83% size:75% because if we don't have the capacity to build an industry 04:45.466 --> 04:48.266 align:left position:17.5% line:83% size:72.5% of the future here, we know others will do that 04:48.266 --> 04:49.600 align:left position:32.5% line:83% size:57.5% because they're doing it right now. 04:49.600 --> 04:50.533 align:left position:40% line:89% size:50% - Right. 04:50.533 --> 04:52.533 align:left position:12.5% line:89% size:77.5% You mentioned 300,000 US jobs. 04:52.533 --> 04:53.433 align:left position:42.5% line:89% size:47.5% - Yeah. 04:53.433 --> 04:54.633 align:left position:30% line:83% size:60% Although I think a big difference 04:54.633 --> 04:58.000 align:left position:17.5% line:83% size:72.5% is that the US industry has a very different structure. 04:58.000 --> 04:59.166 align:left position:42.5% line:83% size:47.5% - Yeah. - Price structure 04:59.166 --> 05:00.266 align:left position:20% line:89% size:70% from the global industry. 05:00.266 --> 05:02.133 align:left position:17.5% line:83% size:72.5% This is, I think, gonna be one of the big challenges 05:02.133 --> 05:04.833 align:left position:25% line:83% size:65% for United States is that what our lift, 05:04.833 --> 05:06.033 align:left position:12.5% line:89% size:77.5% what are called lifting costs, 05:06.033 --> 05:08.000 align:left position:22.5% line:83% size:67.5% so the cost of bringing oil out the ground 05:08.000 --> 05:10.466 align:left position:25% line:83% size:65% or gas out the ground tend to be higher 05:10.466 --> 05:12.633 align:left position:25% line:83% size:65% than the lowest cost producers in the world, 05:12.633 --> 05:13.800 align:left position:20% line:89% size:70% like in the Persian Gulf. 05:13.800 --> 05:15.866 align:left position:17.5% line:83% size:72.5% And so one of the concerns for the US industry 05:15.866 --> 05:17.100 align:left position:15% line:89% size:75% is that if we go to a future 05:17.100 --> 05:19.466 align:left position:22.5% line:83% size:67.5% where oil consumption's radically lower, 05:19.466 --> 05:21.333 align:left position:30% line:83% size:60% that the fraction that's left over 05:21.333 --> 05:23.300 align:left position:17.5% line:83% size:72.5% to be supplied is gonna be dominated by the countries 05:23.300 --> 05:24.700 align:left position:27.5% line:83% size:62.5% that have the lower lifting costs. 05:24.700 --> 05:28.133 align:left position:15% line:83% size:75% And that's for all the great news for the US oil industry 05:28.133 --> 05:31.566 align:left position:20% line:83% size:70% in the last two decades, Matt knows so much about, 05:31.566 --> 05:33.566 align:left position:27.5% line:83% size:62.5% that's bad news for the US oil industry 05:33.566 --> 05:34.800 align:left position:22.5% line:89% size:67.5% looking in the future. 05:34.800 --> 05:38.433 align:left position:15% line:83% size:75% - Well, I think we got to put that into a holistic context 05:38.433 --> 05:39.866 align:left position:20% line:89% size:70% of what is in that cost. 05:39.866 --> 05:43.066 align:left position:20% line:83% size:70% And when we talk about an ESG impact of our industry, 05:43.066 --> 05:45.633 align:left position:17.5% line:83% size:72.5% there's social and there's governance cost in there too. 05:45.633 --> 05:50.400 align:left position:22.5% line:83% size:67.5% So the US industry has the highest standards of DEI 05:50.400 --> 05:51.933 align:left position:30% line:89% size:60% of human rights. 05:51.933 --> 05:54.366 align:left position:20% line:83% size:70% We should know where our energy is coming from. 05:54.366 --> 05:56.666 align:left position:27.5% line:83% size:62.5% We should know who the employers are 05:56.666 --> 06:00.366 align:left position:25% line:83% size:65% and we should compare that to a global product. 06:00.366 --> 06:02.700 align:left position:25% line:83% size:65% It's not potentially just a commodity. 06:02.700 --> 06:05.600 align:left position:27.5% line:83% size:62.5% One thing you'd get from a US barrel 06:05.600 --> 06:08.866 align:left position:25% line:83% size:65% is that known product of the employee base. 06:08.866 --> 06:11.100 align:left position:32.5% line:83% size:57.5% And not only-- - Yeah, that's interesting. 06:11.100 --> 06:14.066 align:left position:17.5% line:83% size:72.5% - You know, I think we have roughly four to 500,000 jobs 06:14.066 --> 06:15.700 align:left position:10% line:89% size:80% just here in the state of Texas. 06:15.700 --> 06:18.500 align:left position:22.5% line:83% size:67.5% So I think the industry is quite a bit larger 06:18.500 --> 06:22.100 align:left position:17.5% line:83% size:72.5% across the US and it's not all jobs are created equal. 06:22.100 --> 06:27.100 align:left position:17.5% line:83% size:72.5% The hourly equivalent wage, we put it well into 06:27.100 --> 06:28.666 align:left position:12.5% line:89% size:77.5% probably the multiple millions. 06:28.666 --> 06:29.866 align:left position:27.5% line:83% size:62.5% We're talking about highly compensated, 06:29.866 --> 06:31.733 align:left position:32.5% line:83% size:57.5% highly trained individuals in the US 06:31.733 --> 06:35.066 align:left position:17.5% line:83% size:72.5% because of the requirements that we have on safety. 06:35.066 --> 06:37.966 align:left position:12.5% line:89% size:77.5% So just from an economic point, 06:37.966 --> 06:41.600 align:left position:25% line:83% size:65% I love the idea about how are we gonna retrain 06:41.600 --> 06:43.733 align:left position:10% line:89% size:80% and how fast are these positions 06:43.733 --> 06:46.966 align:left position:22.5% line:83% size:67.5% because you're leaving communities really high and dry. 06:46.966 --> 06:49.400 align:left position:22.5% line:83% size:67.5% And when I think about manufacturing in the US 06:49.400 --> 06:51.900 align:left position:17.5% line:89% size:72.5% and offshoring that dynamic 06:51.900 --> 06:55.000 align:left position:15% line:83% size:75% and what it left the northern manufacturing cities, 06:55.000 --> 06:56.800 align:left position:32.5% line:83% size:57.5% we did things a little too quickly 06:56.800 --> 07:00.766 align:left position:22.5% line:83% size:67.5% without thinking about the impact on the worker. 07:00.766 --> 07:03.466 align:left position:20% line:83% size:70% - And that kind of leads me into the, in some ways, 07:03.466 --> 07:04.933 align:left position:12.5% line:89% size:77.5% into the boom and bust cycles, 07:04.933 --> 07:06.100 align:left position:12.5% line:89% size:77.5% what are the impacts of those? 07:06.100 --> 07:07.600 align:left position:12.5% line:89% size:77.5% And is it different this time? 07:07.600 --> 07:10.300 align:left position:17.5% line:83% size:72.5% - Boom and bust cycles have a horribly negative impact 07:10.300 --> 07:11.833 align:left position:30% line:89% size:60% to any business. 07:11.833 --> 07:15.766 align:left position:12.5% line:89% size:77.5% So just over two years ago now 07:15.766 --> 07:19.866 align:left position:17.5% line:89% size:72.5% we saw negative oil prices. 07:19.866 --> 07:23.300 align:left position:22.5% line:83% size:67.5% And once it happens, if you're an insurance actuary, 07:23.300 --> 07:24.500 align:left position:17.5% line:89% size:72.5% you have to account for it 07:24.500 --> 07:26.300 align:left position:30% line:83% size:60% potentially being able to happen again. 07:26.300 --> 07:29.100 align:left position:30% line:83% size:60% So that increases the financing cost, 07:29.100 --> 07:31.966 align:left position:22.5% line:83% size:67.5% the risk factor to any individual industry. 07:31.966 --> 07:35.433 align:left position:17.5% line:83% size:72.5% And this industry is seeing the implications of that. 07:35.433 --> 07:38.933 align:left position:17.5% line:83% size:72.5% New students graduated from the Colorado School of Mines 07:38.933 --> 07:41.500 align:left position:27.5% line:83% size:62.5% and talked to that campus recently. 07:41.500 --> 07:43.833 align:left position:27.5% line:83% size:62.5% And they're asking, is there a future? 07:43.833 --> 07:45.000 align:left position:25% line:89% size:65% What should I choose? 07:45.000 --> 07:47.333 align:left position:17.5% line:83% size:72.5% We still need bright minded people to be doing this 07:47.333 --> 07:48.600 align:left position:30% line:89% size:60% the best we can. 07:48.600 --> 07:50.200 align:left position:25% line:83% size:65% So you gotta lay the playing field out there. 07:50.200 --> 07:51.233 align:left position:25% line:89% size:65% These are the risks. 07:51.233 --> 07:52.833 align:left position:20% line:83% size:70% These are the realities, here's the opportunity. 07:52.833 --> 07:55.000 align:left position:32.5% line:83% size:57.5% There's a huge opportunity growing in 07:55.000 --> 07:56.666 align:left position:22.5% line:89% size:67.5% wind, solar, hydrogen, 07:56.666 --> 07:59.500 align:left position:20% line:83% size:70% and we need bright minds going after that too. 07:59.500 --> 08:01.366 align:left position:27.5% line:83% size:62.5% So you gotta follow your passions, 08:01.366 --> 08:05.200 align:left position:22.5% line:83% size:67.5% but these boom and bust make it very, very tough. 08:05.200 --> 08:08.366 align:left position:22.5% line:83% size:67.5% - Yeah, talk about the shaky investor environment 08:08.366 --> 08:09.233 align:left position:30% line:89% size:60% for oil and gas. 08:09.233 --> 08:10.266 align:left position:15% line:89% size:75% Let's hit that a little bit. 08:10.266 --> 08:13.800 align:left position:27.5% line:83% size:62.5% Engine Number One, a group formed by who? 08:13.800 --> 08:16.666 align:left position:15% line:83% size:75% - The founder Chris James has a long history of investing. 08:16.666 --> 08:18.000 align:left position:30% line:83% size:60% And I think with the genius behind 08:18.000 --> 08:21.033 align:left position:17.5% line:83% size:72.5% what he and the core group at Engine Number One did, 08:21.033 --> 08:23.866 align:left position:25% line:83% size:65% is that they spoke to the oil and gas industry 08:23.866 --> 08:28.000 align:left position:17.5% line:89% size:72.5% around shareholder returns. 08:28.000 --> 08:30.966 align:left position:30% line:83% size:60% And so it's not a bunch of dope-smoking, 08:30.966 --> 08:33.133 align:left position:17.5% line:83% size:72.5% tree-hugging, Birkenstock- wearing people saying, 08:33.133 --> 08:35.100 align:left position:20% line:89% size:70% "Hey, go hug the planet." 08:35.100 --> 08:37.500 align:left position:25% line:83% size:65% It was, if you don't as an industry, 08:37.500 --> 08:39.066 align:left position:17.5% line:83% size:72.5% get ready for this future-- - Right. 08:39.066 --> 08:41.300 align:left position:20% line:83% size:70% - you will be destroying shareholder value. 08:41.300 --> 08:42.366 align:left position:25% line:89% size:65% This is an industry. 08:42.366 --> 08:44.833 align:left position:20% line:83% size:70% The oil and gas industry has gone from one 08:44.833 --> 08:48.466 align:left position:30% line:83% size:60% that reliably was generating 10, 20% returns, 08:48.466 --> 08:50.400 align:left position:32.5% line:83% size:57.5% to one that is basically generating 08:50.400 --> 08:51.733 align:left position:22.5% line:89% size:67.5% commodity-like returns 08:51.733 --> 08:55.766 align:left position:22.5% line:83% size:67.5% that are not dissimilar from commodity solar, 08:55.766 --> 08:57.200 align:left position:27.5% line:83% size:62.5% not dissimilar from all kinds of other 08:57.200 --> 08:58.566 align:left position:15% line:89% size:75% highly regulated industries. 08:58.566 --> 09:01.066 align:left position:27.5% line:83% size:62.5% And yet it has more volatility associated with it. 09:01.066 --> 09:02.533 align:left position:25% line:83% size:65% And so in that world, not surprisingly, 09:02.533 --> 09:04.333 align:left position:20% line:83% size:70% shareholders are saying, "Why should I be here?" 09:04.333 --> 09:06.533 align:left position:15% line:89% size:75% - You put low returns in ESG. 09:06.533 --> 09:07.433 align:left position:45% line:89% size:45% Boom. 09:07.433 --> 09:10.233 align:left position:40% line:83% size:50% - And I-- - Money leaves, right? 09:10.233 --> 09:11.533 align:left position:15% line:89% size:75% - Yeah, or it gets destroyed. 09:11.533 --> 09:12.900 align:left position:10% line:89% size:80% - I personally share and welcome 09:12.900 --> 09:14.200 align:left position:15% line:89% size:75% Engine Number One's approach 09:14.200 --> 09:17.366 align:left position:12.5% line:89% size:77.5% and it's highlighting another-- 09:17.366 --> 09:18.966 align:left position:20% line:83% size:70% I come from a little bit different background, 09:18.966 --> 09:24.800 align:left position:22.5% line:83% size:67.5% grew up in a very small family oil and gas company, 09:24.800 --> 09:27.266 align:left position:20% line:89% size:70% 1,000, 2,000 foot wells, 09:27.266 --> 09:28.466 align:left position:22.5% line:89% size:67.5% you lived off cash flow 09:28.466 --> 09:32.933 align:left position:20% line:83% size:70% and we had no multi-state or multi-country contracts. 09:32.933 --> 09:36.466 align:left position:20% line:83% size:70% So I think you're exactly right that energy companies, 09:36.466 --> 09:39.366 align:left position:17.5% line:83% size:72.5% whether they be extractive fossil companies, 09:39.366 --> 09:41.466 align:left position:25% line:83% size:65% whether they be oil, whether they be gas, 09:41.466 --> 09:45.100 align:left position:15% line:83% size:75% you're just a company and you need to be generating returns 09:45.100 --> 09:49.300 align:left position:12.5% line:83% size:77.5% for your investors and planning a strategy for the future. 09:49.300 --> 09:54.433 align:left position:22.5% line:83% size:67.5% And they were not vocal about the transition strategy 09:54.433 --> 09:55.866 align:left position:32.5% line:89% size:57.5% for the future. 09:55.866 --> 09:57.100 align:left position:30% line:83% size:60% - So these firms are under pressure 09:57.100 --> 09:58.500 align:left position:12.5% line:89% size:77.5% to do something about climate. 09:58.500 --> 10:00.466 align:left position:27.5% line:83% size:62.5% They have a limited number of strategies 10:00.466 --> 10:01.566 align:left position:25% line:89% size:65% that they can follow. 10:01.566 --> 10:02.833 align:left position:27.5% line:83% size:62.5% They can be kind of last man pumping, 10:02.833 --> 10:05.900 align:left position:20% line:83% size:70% kind of the lowest costs and keep on pumping, 10:05.900 --> 10:08.033 align:left position:17.5% line:83% size:72.5% or they can invest in areas where they have skills 10:08.033 --> 10:09.600 align:left position:30% line:83% size:60% that overlap with the energy transition 10:09.600 --> 10:11.333 align:left position:20% line:89% size:70% as we so gently call it. 10:11.333 --> 10:12.500 align:left position:20% line:89% size:70% They're good at hydrogen 10:12.500 --> 10:14.300 align:left position:22.5% line:83% size:67.5% 'cause they do a lot of hydrogen refineries right now. 10:14.300 --> 10:17.066 align:left position:15% line:83% size:75% I think that actually is one of the most promising areas. 10:17.066 --> 10:18.366 align:left position:12.5% line:89% size:77.5% They're very good at down hole. 10:18.366 --> 10:21.433 align:left position:22.5% line:83% size:67.5% And so that means that if we have a future 10:21.433 --> 10:24.733 align:left position:20% line:83% size:70% where we capture the CO2 and put it underground, 10:24.733 --> 10:26.300 align:left position:25% line:83% size:65% then they're gonna be very good at doing that. 10:26.300 --> 10:27.666 align:left position:27.5% line:83% size:62.5% The carbon capture storage industry 10:27.666 --> 10:29.100 align:left position:20% line:89% size:70% and then also geothermal. 10:29.100 --> 10:32.133 align:left position:22.5% line:83% size:67.5% While we been sleeping, there's been amazing innovation 10:32.133 --> 10:34.000 align:left position:17.5% line:89% size:72.5% in drilling for geothermal. 10:34.000 --> 10:38.133 align:left position:15% line:83% size:75% Geothermal could become a big part of a renewable future 10:38.133 --> 10:40.300 align:left position:12.5% line:89% size:77.5% because unlike solar and wind, 10:40.300 --> 10:41.666 align:left position:12.5% line:89% size:77.5% the variability is much lower. 10:41.666 --> 10:44.133 align:left position:25% line:83% size:65% So geothermal is one of those energy sources 10:44.133 --> 10:45.866 align:left position:25% line:83% size:65% where the innovations on drilling matters. 10:45.866 --> 10:47.933 align:left position:20% line:83% size:70% - I think you and I share the exact same concern. 10:47.933 --> 10:53.533 align:left position:20% line:83% size:70% You know, how is it gonna affect Joe Public tomorrow? 10:53.533 --> 10:57.766 align:left position:17.5% line:83% size:72.5% And I'm worried that we're in such a binary world. 10:57.766 --> 10:59.366 align:left position:30% line:83% size:60% The switch is on, the switch is off. 10:59.366 --> 11:02.333 align:left position:25% line:83% size:65% The answer is this or the answer is that. 11:02.333 --> 11:05.300 align:left position:27.5% line:83% size:62.5% It has to be a mix of all of this, 11:05.300 --> 11:06.900 align:left position:12.5% line:89% size:77.5% but how do we keep the urgency? 11:06.900 --> 11:09.200 align:left position:15% line:83% size:75% - There's an anti-government kinda feeling 11:09.200 --> 11:10.300 align:left position:10% line:89% size:80% in a lot of the energy business. 11:10.300 --> 11:13.133 align:left position:17.5% line:89% size:72.5% It's a frontier mentality. 11:13.133 --> 11:14.533 align:left position:22.5% line:83% size:67.5% And then when you look behind the curtain, 11:14.533 --> 11:15.533 align:left position:30% line:89% size:60% what do you see? 11:15.533 --> 11:16.633 align:left position:20% line:83% size:70% The government's actually done a lot of things 11:16.633 --> 11:17.766 align:left position:15% line:89% size:75% that have been very helpful. 11:17.766 --> 11:20.500 align:left position:22.5% line:83% size:67.5% The horizontal drilling and fracking revolution, 11:20.500 --> 11:22.666 align:left position:20% line:83% size:70% not all of it, but a big part of the early investments 11:22.666 --> 11:25.000 align:left position:22.5% line:83% size:67.5% were frankly government backed in one way or another. 11:25.000 --> 11:26.966 align:left position:25% line:83% size:65% So it's a mixture of public and private. 11:26.966 --> 11:28.266 align:left position:15% line:89% size:75% This is an area where I think 11:28.266 --> 11:29.833 align:left position:20% line:83% size:70% there's a very important function for government, 11:29.833 --> 11:32.266 align:left position:30% line:83% size:60% along with other social institutions, 11:32.266 --> 11:37.400 align:left position:17.5% line:83% size:72.5% churches, and so on, is we have to make a credible offer 11:37.400 --> 11:41.766 align:left position:22.5% line:83% size:67.5% to the communities that are going to be harmed 11:41.766 --> 11:42.933 align:left position:20% line:89% size:70% by the loss of employment 11:42.933 --> 11:44.833 align:left position:15% line:83% size:75% that comes from the elements of this energy transition. 11:44.833 --> 11:46.166 align:left position:27.5% line:89% size:62.5% - Yep, completely. 11:46.166 --> 11:48.766 align:left position:17.5% line:83% size:72.5% - We've talked a lot about economic benefits and challenges 11:48.766 --> 11:50.600 align:left position:15% line:89% size:75% of the oil and gas industry. 11:50.600 --> 11:52.566 align:left position:25% line:83% size:65% Let's look at some of the environmental impacts 11:52.566 --> 11:55.633 align:left position:12.5% line:83% size:77.5% and let's just start right with the big one, CO2 emissions. 11:55.633 --> 11:58.533 align:left position:20% line:83% size:70% What level emissions are oil and gas responsible for 11:58.533 --> 12:01.233 align:left position:20% line:83% size:70% and what are some of the things we can do about it? 12:01.233 --> 12:03.133 align:left position:30% line:83% size:60% - Well, globally, oil and gas together 12:03.133 --> 12:05.233 align:left position:25% line:83% size:65% are about 18 billion tons of CO2. 12:05.233 --> 12:06.866 align:left position:12.5% line:89% size:77.5% So a little bit more than coal. 12:06.866 --> 12:09.366 align:left position:22.5% line:83% size:67.5% So oil and gas together are a central part 12:09.366 --> 12:11.233 align:left position:25% line:83% size:65% of the global buildup of carbon dioxide. 12:11.233 --> 12:12.733 align:left position:22.5% line:83% size:67.5% And therefore they have to be a central part 12:12.733 --> 12:13.933 align:left position:30% line:89% size:60% of the solution. 12:13.933 --> 12:16.266 align:left position:20% line:83% size:70% - Is it a fuels issue or is it an emissions issue? 12:16.266 --> 12:18.033 align:left position:20% line:83% size:70% What can we do to capture some of those emissions? 12:18.033 --> 12:20.000 align:left position:27.5% line:83% size:62.5% - Well, I do think it's an emissions issue 12:20.000 --> 12:24.200 align:left position:12.5% line:83% size:77.5% and let's tackle it and improve and clean up our own act. 12:24.200 --> 12:25.933 align:left position:27.5% line:83% size:62.5% We have to cut out the low hanging fruit. 12:25.933 --> 12:28.600 align:left position:30% line:83% size:60% These are methane emissions, methane leaks. 12:28.600 --> 12:30.766 align:left position:27.5% line:89% size:62.5% These are flaring. 12:30.766 --> 12:31.733 align:left position:27.5% line:89% size:62.5% Why are we flaring? 12:31.733 --> 12:33.400 align:left position:27.5% line:83% size:62.5% Sometimes you have an exploratory well, 12:33.400 --> 12:35.866 align:left position:12.5% line:83% size:77.5% you don't know how large you're gonna build your facilities 12:35.866 --> 12:38.133 align:left position:12.5% line:89% size:77.5% and you have temporary flaring. 12:38.133 --> 12:39.733 align:left position:12.5% line:89% size:77.5% And then you put it in a pipe. 12:39.733 --> 12:43.533 align:left position:15% line:83% size:75% But not on large scale basins where we know the resource 12:43.533 --> 12:44.966 align:left position:27.5% line:89% size:62.5% is gonna be found. 12:44.966 --> 12:47.200 align:left position:17.5% line:83% size:72.5% We should come to agreement and eliminate that 12:47.200 --> 12:49.233 align:left position:15% line:89% size:75% or nearly eliminate flaring. 12:49.233 --> 12:51.866 align:left position:20% line:83% size:70% So we can be a leader in the US in oil and gas. 12:51.866 --> 12:54.266 align:left position:22.5% line:83% size:67.5% Once we set that tone, set that pace, 12:54.266 --> 12:58.533 align:left position:25% line:83% size:65% we should demand that the globe follows 12:58.533 --> 13:02.166 align:left position:22.5% line:83% size:67.5% or not use that energy here in the US. 13:02.166 --> 13:03.466 align:left position:27.5% line:83% size:62.5% So I think there's a lot of options 13:03.466 --> 13:05.766 align:left position:20% line:83% size:70% and a lot of opportunity for us to be leaders. 13:05.766 --> 13:06.900 align:left position:22.5% line:89% size:67.5% - Lead technologically. 13:06.900 --> 13:08.000 align:left position:42.5% line:89% size:47.5% - Yeah. 13:08.000 --> 13:10.166 align:left position:15% line:83% size:75% - Carbon capture and storage is talked about a lot, 13:10.166 --> 13:11.600 align:left position:12.5% line:89% size:77.5% a way to capture the emissions, 13:11.600 --> 13:13.800 align:left position:32.5% line:83% size:57.5% post combustion out of power plants 13:13.800 --> 13:16.366 align:left position:20% line:83% size:70% and refineries and stacks of different kinds. 13:16.366 --> 13:19.433 align:left position:27.5% line:83% size:62.5% And then you put it back in the earth. 13:19.433 --> 13:20.933 align:left position:12.5% line:89% size:77.5% That's a subsurface challenge. 13:20.933 --> 13:22.766 align:left position:30% line:83% size:60% Is this someplace you can lead to? 13:22.766 --> 13:23.866 align:left position:40% line:89% size:50% - It is. 13:23.866 --> 13:26.466 align:left position:25% line:83% size:65% And there's a lot of synergistic opportunities there. 13:26.466 --> 13:27.933 align:left position:10% line:89% size:80% So you think about these fields, 13:27.933 --> 13:30.800 align:left position:15% line:83% size:75% these reservoirs, subsurface that we've extracted 13:30.800 --> 13:33.000 align:left position:27.5% line:83% size:62.5% from for now close to a hundred years, 13:33.000 --> 13:34.800 align:left position:25% line:83% size:65% over a hundred years in some cases, 13:34.800 --> 13:37.733 align:left position:15% line:83% size:75% they've left some void space, some reservoir space, 13:37.733 --> 13:41.600 align:left position:30% line:83% size:60% some of these are within 5, 10, 15 miles 13:41.600 --> 13:44.933 align:left position:22.5% line:83% size:67.5% of some of the largest power plants in the US. 13:44.933 --> 13:47.500 align:left position:20% line:83% size:70% We can put the capturing systems on the tail end 13:47.500 --> 13:50.333 align:left position:22.5% line:83% size:67.5% of those power plants, use the same pipelines, 13:50.333 --> 13:52.333 align:left position:30% line:83% size:60% put it right back into those fields 13:52.333 --> 13:55.433 align:left position:15% line:83% size:75% where a lot of it came from, those reservoirs. 13:55.433 --> 13:59.400 align:left position:27.5% line:83% size:62.5% So these are large scale projects, 13:59.400 --> 14:02.733 align:left position:17.5% line:83% size:72.5% large scale opportunity to capture millions of tons of CO2. 14:02.733 --> 14:06.166 align:left position:27.5% line:83% size:62.5% And so the industry can close the loop, 14:06.166 --> 14:08.500 align:left position:30% line:83% size:60% so to say, of the emission cycle. 14:08.500 --> 14:10.133 align:left position:27.5% line:83% size:62.5% - This is an area I completely agree with Matt. 14:10.133 --> 14:12.966 align:left position:15% line:83% size:75% This is an area where the US could be an enormous leader 14:12.966 --> 14:14.566 align:left position:12.5% line:89% size:77.5% and we're doing some projects. 14:14.566 --> 14:17.566 align:left position:20% line:83% size:70% I'm really worried about us staying the course. 14:17.566 --> 14:20.533 align:left position:20% line:83% size:70% We've been talking a lot about it, not doing so much. 14:20.533 --> 14:24.000 align:left position:22.5% line:83% size:67.5% The death rate between announcement and actual project 14:24.000 --> 14:26.233 align:left position:27.5% line:83% size:62.5% for the big carbon capture storage projects 14:26.233 --> 14:29.166 align:left position:20% line:83% size:70% that involve power plants and so on is like 95%. 14:29.166 --> 14:32.000 align:left position:15% line:83% size:75% And so it's because somebody says, I wanna do a project. 14:32.000 --> 14:33.633 align:left position:22.5% line:83% size:67.5% And then the government says we will support it. 14:33.633 --> 14:34.866 align:left position:25% line:83% size:65% Or somebody else says they'll support it. 14:34.866 --> 14:36.133 align:left position:12.5% line:89% size:77.5% And then something comes apart 14:36.133 --> 14:38.666 align:left position:30% line:83% size:60% and the financial glue melts away. 14:38.666 --> 14:41.866 align:left position:27.5% line:83% size:62.5% So we've got to do more of these projects 14:41.866 --> 14:45.333 align:left position:17.5% line:83% size:72.5% and actually carry them to fruition, learn from them, 14:45.333 --> 14:48.000 align:left position:15% line:89% size:75% because leadership by itself 14:48.000 --> 14:49.666 align:left position:30% line:83% size:60% doesn't solve the climate problem. 14:49.666 --> 14:52.333 align:left position:12.5% line:83% size:77.5% It's actually followership that solves the climate problem. 14:52.333 --> 14:54.033 align:left position:27.5% line:89% size:62.5% It's because the US 14:54.033 --> 14:56.366 align:left position:22.5% line:83% size:67.5% is one fifth of global emissions and shrinking. 14:56.366 --> 14:58.933 align:left position:30% line:83% size:60% And so we need to develop those industries 14:58.933 --> 15:01.633 align:left position:12.5% line:83% size:77.5% because it's gonna be good for Americans and American jobs, 15:01.633 --> 15:04.466 align:left position:27.5% line:83% size:62.5% but also because by demonstrating the technology, 15:04.466 --> 15:06.066 align:left position:30% line:83% size:60% you then make it possible for others 15:06.066 --> 15:07.266 align:left position:30% line:83% size:60% to follow along. - Yeah. 15:07.266 --> 15:09.200 align:left position:17.5% line:83% size:72.5% I've had a team called the Gulf Coast Carbon Center, 15:09.200 --> 15:13.100 align:left position:15% line:83% size:75% the last two decades leading these big experiments 15:13.100 --> 15:16.300 align:left position:27.5% line:83% size:62.5% in brines, putting it in salt water. 15:16.300 --> 15:18.966 align:left position:25% line:83% size:65% But like you say, the commerciality of this, 15:18.966 --> 15:21.733 align:left position:20% line:83% size:70% it seems to be mostly be an economic challenge, 15:21.733 --> 15:23.300 align:left position:35% line:83% size:55% not so much a technical one anymore. 15:23.300 --> 15:24.733 align:left position:20% line:89% size:70% We know places to do this 15:24.733 --> 15:27.133 align:left position:27.5% line:83% size:62.5% and you can put it at rate and volume, 15:27.133 --> 15:32.400 align:left position:22.5% line:83% size:67.5% but how do you get the right cash streams in place? 15:32.400 --> 15:35.233 align:left position:15% line:83% size:75% - So I think this is the key point is it's to put a sharp, 15:35.233 --> 15:38.700 align:left position:20% line:83% size:70% even sharper point on it, is it's a finance challenge. 15:38.700 --> 15:40.200 align:left position:27.5% line:83% size:62.5% Companies that sit behind these projects 15:40.200 --> 15:42.933 align:left position:22.5% line:83% size:67.5% need to be able to see a stream of payments 15:42.933 --> 15:44.633 align:left position:27.5% line:83% size:62.5% that make the risks that are intrinsic 15:44.633 --> 15:47.700 align:left position:30% line:83% size:60% in working in new technologies bearable. 15:47.700 --> 15:50.600 align:left position:17.5% line:83% size:72.5% This is the big difference between CCUS and CCS. 15:50.600 --> 15:54.700 align:left position:17.5% line:83% size:72.5% So CCUS is carbon capture, utilization, and storage. 15:54.700 --> 15:56.133 align:left position:22.5% line:83% size:67.5% The idea that you take the carbon dioxide 15:56.133 --> 15:58.900 align:left position:22.5% line:83% size:67.5% from a power plant, for example, you put it underground 15:58.900 --> 16:01.366 align:left position:22.5% line:83% size:67.5% and you use it for some commercial purpose, 16:01.366 --> 16:03.033 align:left position:20% line:83% size:70% like extracting more oil. [Scott] Right. 16:03.033 --> 16:05.800 align:left position:20% line:83% size:70% - So that's a way to get the industry started. 16:05.800 --> 16:08.266 align:left position:12.5% line:89% size:77.5% But the really big game is CCS. 16:08.266 --> 16:10.366 align:left position:30% line:83% size:60% It's just carbon capture and storage, 16:10.366 --> 16:12.100 align:left position:12.5% line:89% size:77.5% not producing more hydrocarbon 16:12.100 --> 16:13.833 align:left position:30% line:83% size:60% or having some of that come back up. 16:13.833 --> 16:16.533 align:left position:35% line:83% size:55% So if you can learn from the CCUS 16:16.533 --> 16:20.433 align:left position:15% line:83% size:75% in a way that makes CCS more transformative, then fantastic. 16:20.433 --> 16:22.033 align:left position:17.5% line:89% size:72.5% But this is an area where, 16:22.033 --> 16:23.700 align:left position:27.5% line:83% size:62.5% to the question of our debate today, 16:23.700 --> 16:26.333 align:left position:12.5% line:89% size:77.5% about US oil and gas industry, 16:26.333 --> 16:30.633 align:left position:17.5% line:83% size:72.5% this is where a US industry that learned in oil and gas 16:30.633 --> 16:33.066 align:left position:25% line:83% size:65% and applies the same skills or similar skills 16:33.066 --> 16:34.533 align:left position:25% line:89% size:65% to carbon management. 16:34.533 --> 16:36.533 align:left position:17.5% line:83% size:72.5% That's a vibrant industry. - Absolutely. 16:36.533 --> 16:40.200 align:left position:10% line:89% size:80% And big volumes and big dollars. 16:40.200 --> 16:41.433 align:left position:22.5% line:89% size:67.5% People will pay for it. 16:41.433 --> 16:43.466 align:left position:25% line:89% size:65% It comes out somehow. 16:43.466 --> 16:44.833 align:left position:32.5% line:89% size:57.5% Methane leaks. 16:44.833 --> 16:46.166 align:left position:22.5% line:89% size:67.5% Why are they important? 16:46.166 --> 16:47.666 align:left position:20% line:89% size:70% Why does methane matter? 16:47.666 --> 16:48.833 align:left position:15% line:89% size:75% And what can we do about it? 16:48.833 --> 16:50.000 align:left position:15% line:89% size:75% - It matters because methane 16:50.000 --> 16:51.533 align:left position:32.5% line:83% size:57.5% is an extremely strong greenhouse gas. 16:51.533 --> 16:53.233 align:left position:30% line:83% size:60% And depending on how you account, 16:53.233 --> 16:56.466 align:left position:25% line:83% size:65% it's 20 to more than 100 times more potent 16:56.466 --> 16:59.266 align:left position:15% line:83% size:75% as a greenhouse gas compared with carbon dioxide, 16:59.266 --> 17:01.033 align:left position:15% line:89% size:75% but it has a short lifetime. 17:01.033 --> 17:02.400 align:left position:32.5% line:83% size:57.5% So when it goes in the atmosphere, 17:02.400 --> 17:04.033 align:left position:27.5% line:83% size:62.5% it causes a lot of warming quickly, 17:04.033 --> 17:05.533 align:left position:25% line:83% size:65% but then it's removed from the atmosphere 17:05.533 --> 17:07.066 align:left position:12.5% line:89% size:77.5% on the scale of about a decade, 17:07.066 --> 17:09.666 align:left position:17.5% line:83% size:72.5% as opposed to on the scale of about a hundred years 17:09.666 --> 17:11.000 align:left position:27.5% line:89% size:62.5% for carbon dioxide. 17:11.000 --> 17:14.166 align:left position:20% line:83% size:70% So it matters because it is accelerating warming 17:14.166 --> 17:17.200 align:left position:17.5% line:83% size:72.5% at a time when the world's warming is already accelerating. 17:17.200 --> 17:18.233 align:left position:32.5% line:89% size:57.5% - Right, right. 17:18.233 --> 17:21.566 align:left position:22.5% line:83% size:67.5% - And I'd say, it's the product we sell to use 17:21.566 --> 17:23.700 align:left position:35% line:83% size:55% for much more beneficial purposes 17:23.700 --> 17:26.033 align:left position:30% line:83% size:60% than leaking into the atmosphere. 17:26.033 --> 17:29.200 align:left position:25% line:83% size:65% So we should capture the product and sell it 17:29.200 --> 17:32.266 align:left position:27.5% line:83% size:62.5% and not let it leak through lazy operations, 17:32.266 --> 17:36.333 align:left position:25% line:83% size:65% cost cutting measures and improper maintenance. 17:36.333 --> 17:38.166 align:left position:30% line:83% size:60% And we're at this nice confluence 17:38.166 --> 17:41.866 align:left position:25% line:83% size:65% where we have amazing technologies that can help us. 17:41.866 --> 17:45.466 align:left position:15% line:83% size:75% I mean, there are satellites flying overhead right now, 17:45.466 --> 17:48.200 align:left position:17.5% line:83% size:72.5% imaging methane emissions. - Yeah. 17:48.200 --> 17:50.400 align:left position:22.5% line:83% size:67.5% - We have these thermal imaging cameras. 17:50.400 --> 17:54.233 align:left position:15% line:89% size:75% We plug those in to the cloud 17:54.233 --> 17:56.200 align:left position:32.5% line:83% size:57.5% and we can look at abnormalities. 17:56.200 --> 17:57.766 align:left position:25% line:83% size:65% As soon as that sees something different, 17:57.766 --> 18:01.500 align:left position:15% line:83% size:75% we can call out someone right away and we can stop the leak. 18:01.500 --> 18:02.666 align:left position:15% line:89% size:75% - Turns out for a long time, 18:02.666 --> 18:04.933 align:left position:17.5% line:83% size:72.5% one of the largest sources of fugitive methane emissions 18:04.933 --> 18:08.033 align:left position:22.5% line:83% size:67.5% in the US was pneumatic valves on gas pipelines, 18:08.033 --> 18:10.666 align:left position:20% line:83% size:70% 'cause the pipeline used the pressure of the gas 18:10.666 --> 18:13.866 align:left position:12.5% line:83% size:77.5% to move the valve and then just leaked a little bit of that 18:13.866 --> 18:14.933 align:left position:25% line:89% size:65% into the atmosphere. 18:14.933 --> 18:16.566 align:left position:30% line:83% size:60% And that was all, when you added it all up 18:16.566 --> 18:18.266 align:left position:15% line:89% size:75% was a huge amount of methane. 18:18.266 --> 18:19.566 align:left position:27.5% line:83% size:62.5% You can change the different kinds of valves 18:19.566 --> 18:21.000 align:left position:27.5% line:89% size:62.5% that have no leak. 18:21.000 --> 18:23.833 align:left position:30% line:83% size:60% And nobody had an incentive to do it. 18:23.833 --> 18:25.133 align:left position:30% line:83% size:60% Now they have an incentive to do it, 18:25.133 --> 18:26.533 align:left position:12.5% line:89% size:77.5% and the industry's responding. 18:26.533 --> 18:28.166 align:left position:17.5% line:89% size:72.5% - Right, can we lead there? 18:28.166 --> 18:31.300 align:left position:17.5% line:83% size:72.5% The world, there's a world oil and gas industry. 18:31.300 --> 18:33.666 align:left position:12.5% line:89% size:77.5% Does it do it as well as we do? 18:33.666 --> 18:35.666 align:left position:22.5% line:83% size:67.5% - So the Europeans are doing a very good job of it, 18:35.666 --> 18:37.666 align:left position:25% line:83% size:65% but I think a lot of these sovereignties, 18:37.666 --> 18:39.533 align:left position:30% line:83% size:60% they answer to a different client. 18:39.533 --> 18:41.800 align:left position:22.5% line:83% size:67.5% And that's the one that we're gonna have to watch. 18:41.800 --> 18:44.466 align:left position:27.5% line:83% size:62.5% You have all of the OPEC Plus members 18:44.466 --> 18:46.433 align:left position:25% line:83% size:65% with extremely large volumes of production 18:46.433 --> 18:49.766 align:left position:20% line:83% size:70% and pretty high emissions in a lot of cases. 18:49.766 --> 18:51.500 align:left position:12.5% line:89% size:77.5% So that's gonna be a challenge. 18:51.500 --> 18:53.800 align:left position:15% line:83% size:75% - Look, hydraulic fracturing, cracking rock 18:53.800 --> 18:55.466 align:left position:25% line:83% size:65% through hydraulically pressured fluids, 18:55.466 --> 18:57.166 align:left position:25% line:83% size:65% been done a long time in vertical wells 18:57.166 --> 18:58.366 align:left position:20% line:89% size:70% and now horizontal wells. 18:58.366 --> 19:01.533 align:left position:17.5% line:89% size:72.5% Fracking is the vernacular. 19:01.533 --> 19:03.500 align:left position:15% line:89% size:75% What are the actual concerns? 19:03.500 --> 19:08.133 align:left position:15% line:83% size:75% The things that have shown to actually impact human health 19:08.133 --> 19:10.166 align:left position:22.5% line:83% size:67.5% or the environment and things that didn't? 19:10.166 --> 19:12.500 align:left position:17.5% line:83% size:72.5% - I think through multiple years and multiple studies, 19:12.500 --> 19:16.066 align:left position:30% line:83% size:60% the human health component is negligible. 19:16.066 --> 19:19.400 align:left position:17.5% line:83% size:72.5% Over hundreds of thousands of wells, that's been shown. 19:19.400 --> 19:23.633 align:left position:15% line:83% size:75% But the environmental impact is still out for debate. 19:23.633 --> 19:26.366 align:left position:30% line:83% size:60% We're using a lot of water to do this. 19:26.366 --> 19:28.366 align:left position:17.5% line:89% size:72.5% If we're using fresh water 19:28.366 --> 19:30.800 align:left position:27.5% line:83% size:62.5% and we're using it in the frack process, 19:30.800 --> 19:32.200 align:left position:30% line:83% size:60% we're eventually disposing of it. 19:32.200 --> 19:34.833 align:left position:20% line:83% size:70% So what you can do is you can use produced water, 19:34.833 --> 19:37.733 align:left position:20% line:83% size:70% which was already 10,000 feet under the surface. 19:37.733 --> 19:40.366 align:left position:17.5% line:83% size:72.5% - Old oceans, buried in the porous space in the rocks. 19:40.366 --> 19:43.033 align:left position:25% line:83% size:65% - Yes, and it's mixed with oil already. 19:43.033 --> 19:44.533 align:left position:12.5% line:89% size:77.5% So you use that produced water 19:44.533 --> 19:46.233 align:left position:35% line:83% size:55% and then you actually recycle it. 19:46.233 --> 19:49.166 align:left position:22.5% line:83% size:67.5% So I think that has to be a larger component. 19:49.166 --> 19:53.500 align:left position:12.5% line:83% size:77.5% So this is a great point where we can't just focus on CO2. 19:53.500 --> 19:55.800 align:left position:27.5% line:83% size:62.5% We have to focus on the whole impact, 19:55.800 --> 20:00.866 align:left position:17.5% line:83% size:72.5% but no, the early concerns of the human impact, 20:00.866 --> 20:02.833 align:left position:15% line:89% size:75% shallow water aquifer impact 20:02.833 --> 20:05.566 align:left position:17.5% line:83% size:72.5% almost completely dispelled through proper practices. 20:05.566 --> 20:06.500 align:left position:32.5% line:89% size:57.5% [Scott] Right. 20:06.500 --> 20:07.800 align:left position:12.5% line:89% size:77.5% - That's the key thing though. 20:07.800 --> 20:09.500 align:left position:32.5% line:83% size:57.5% Proper drilling and well completion 20:09.500 --> 20:12.800 align:left position:17.5% line:83% size:72.5% resolves the concerns about shallow aquifer impacts. 20:12.800 --> 20:14.433 align:left position:12.5% line:89% size:77.5% But only if everybody does it. 20:14.433 --> 20:16.500 align:left position:25% line:83% size:65% And that's, I think, what's been learned 20:16.500 --> 20:19.533 align:left position:32.5% line:83% size:57.5% is that there's still a big variation 20:19.533 --> 20:22.300 align:left position:10% line:89% size:80% in behavior inside the industry. 20:22.300 --> 20:24.633 align:left position:27.5% line:83% size:62.5% Big operators have a big incentive now, 20:24.633 --> 20:27.500 align:left position:17.5% line:83% size:72.5% a growing incentive to make sure that the small operators 20:27.500 --> 20:30.233 align:left position:10% line:89% size:80% play ball because the reputation 20:30.233 --> 20:32.000 align:left position:35% line:83% size:55% of the entire industry is at stake. 20:32.000 --> 20:34.000 align:left position:15% line:89% size:75% - The Santa Monica oil spill, 20:34.000 --> 20:36.200 align:left position:30% line:83% size:60% even though that was a small producer 20:36.200 --> 20:39.666 align:left position:30% line:83% size:60% and the cause is still being studied, 20:39.666 --> 20:40.966 align:left position:15% line:89% size:75% it hurts the whole industry. 20:40.966 --> 20:45.333 align:left position:30% line:83% size:60% So everybody has to up the standards 20:45.333 --> 20:46.833 align:left position:35% line:83% size:55% and make sure everybody's playing 20:46.833 --> 20:48.466 align:left position:15% line:89% size:75% with the same high standards. 20:48.466 --> 20:50.666 align:left position:12.5% line:83% size:77.5% - But I think one of the things we've also learned from this 20:50.666 --> 20:52.333 align:left position:32.5% line:83% size:57.5% is that people process information 20:52.333 --> 20:54.733 align:left position:25% line:83% size:65% about risk and impact in very different ways. 20:54.733 --> 20:56.133 align:left position:25% line:83% size:65% All these industries in various ways 20:56.133 --> 20:57.833 align:left position:17.5% line:89% size:72.5% have environmental impacts. 20:57.833 --> 21:01.333 align:left position:25% line:83% size:65% The oil industry has impacts from oil leaks. 21:01.333 --> 21:03.566 align:left position:22.5% line:83% size:67.5% The renewables industry has environmental impacts 21:03.566 --> 21:06.933 align:left position:17.5% line:83% size:72.5% from land that's taken over at very low power densities 21:06.933 --> 21:09.966 align:left position:27.5% line:83% size:62.5% and larger and more expansive areas of land. 21:09.966 --> 21:13.900 align:left position:15% line:83% size:75% And this is a very important area for the civilized debate 21:13.900 --> 21:15.766 align:left position:25% line:83% size:65% to focus on what are the real trade offs 21:15.766 --> 21:20.633 align:left position:12.5% line:83% size:77.5% that we wanna bear as a result of the way we get energy. 21:21.133 --> 21:22.633 align:left position:32.5% line:83% size:57.5% - I think it's interesting to think about 21:22.633 --> 21:26.800 align:left position:20% line:89% size:70% what is a renewable spill 21:26.800 --> 21:31.533 align:left position:17.5% line:83% size:72.5% because once up and running pretty low impact industry 21:31.533 --> 21:34.200 align:left position:30% line:83% size:60% at the source of the energy capture. 21:34.200 --> 21:35.300 align:left position:22.5% line:83% size:67.5% - I mean, occasionally a turbine blade 21:35.300 --> 21:38.066 align:left position:20% line:83% size:70% will fly off or one will burn up, but it's way low. 21:38.066 --> 21:39.700 align:left position:32.5% line:83% size:57.5% - So I think-- - But the land use impacts 21:39.700 --> 21:40.700 align:left position:32.5% line:89% size:57.5% are really big. 21:40.700 --> 21:42.266 align:left position:30% line:89% size:60% - So that's one. 21:42.266 --> 21:45.800 align:left position:12.5% line:83% size:77.5% - Jesse Ausubel had this really important set of insights 21:45.800 --> 21:49.200 align:left position:17.5% line:83% size:72.5% about power density and is absolutely right about this. 21:49.200 --> 21:53.233 align:left position:17.5% line:83% size:72.5% And the industry cannot be reckless about this question. 21:53.233 --> 21:54.900 align:left position:27.5% line:83% size:62.5% This is why there's such a big difference 21:54.900 --> 21:59.233 align:left position:27.5% line:83% size:62.5% between shifting to 60, 80% renewables 21:59.233 --> 22:01.266 align:left position:22.5% line:89% size:67.5% versus 100% renewables. 22:01.266 --> 22:05.133 align:left position:27.5% line:83% size:62.5% And 100% renewables is almost everywhere, 22:05.133 --> 22:07.600 align:left position:22.5% line:83% size:67.5% a reckless idea because the extra land you need 22:07.600 --> 22:09.833 align:left position:15% line:83% size:75% for all that solar and wind, especially solar, 22:09.833 --> 22:11.766 align:left position:30% line:83% size:60% that's a waste of natural resources. 22:11.766 --> 22:12.833 align:left position:37.5% line:89% size:52.5% [Matt] Yes. 22:12.833 --> 22:14.866 align:left position:22.5% line:83% size:67.5% - Well, look, we've had a wonderful conversation. 22:14.866 --> 22:16.133 align:left position:20% line:89% size:70% How would you sum it up? 22:16.133 --> 22:17.266 align:left position:40% line:89% size:50% You know? 22:17.266 --> 22:18.166 align:left position:45% line:89% size:45% Matt? 22:18.166 --> 22:19.033 align:left position:42.5% line:89% size:47.5% - Sure. 22:19.033 --> 22:20.133 align:left position:17.5% line:89% size:72.5% Maybe I'm a little biased, 22:20.133 --> 22:23.233 align:left position:27.5% line:83% size:62.5% but I think we need domestic energy champions. 22:23.233 --> 22:26.200 align:left position:22.5% line:83% size:67.5% We need people that are taking a leadership stance, 22:26.200 --> 22:27.833 align:left position:22.5% line:89% size:67.5% doing it the right way. 22:27.833 --> 22:29.833 align:left position:22.5% line:83% size:67.5% We need to be embracing all of the above, 22:29.833 --> 22:33.000 align:left position:15% line:89% size:75% the energy everything bagel, 22:33.000 --> 22:39.533 align:left position:15% line:83% size:75% but domestic oil and gas has a great strategic advantage 22:39.533 --> 22:41.200 align:left position:20% line:83% size:70% due to the infrastructure we've already had in place, 22:41.200 --> 22:43.100 align:left position:15% line:89% size:75% the resources below our feet, 22:43.100 --> 22:47.033 align:left position:20% line:83% size:70% the way we operate above ground and the way we 22:47.033 --> 22:49.933 align:left position:20% line:83% size:70% hold both the social and government standards 22:49.933 --> 22:51.833 align:left position:22.5% line:89% size:67.5% at a high regard, too. 22:51.833 --> 22:55.300 align:left position:15% line:83% size:75% What that's gonna lead to is, I hope a discussion 22:55.300 --> 22:57.600 align:left position:10% line:89% size:80% when you're filling up your car, 22:57.600 --> 23:00.533 align:left position:12.5% line:83% size:77.5% when you're heating your home, when you're cooking, 23:00.533 --> 23:03.600 align:left position:25% line:83% size:65% when you're using the plastics in our everyday life, 23:03.600 --> 23:06.600 align:left position:12.5% line:83% size:77.5% where did that molecule, where did that energy come from? 23:06.600 --> 23:09.000 align:left position:20% line:83% size:70% And I think that drives a little bit of preference 23:09.000 --> 23:12.033 align:left position:20% line:83% size:70% to make sure it's coming from either a European 23:12.033 --> 23:14.266 align:left position:12.5% line:89% size:77.5% or the US platform in general. 23:14.266 --> 23:17.700 align:left position:30% line:83% size:60% And this domestic energy is supporting 23:17.700 --> 23:20.733 align:left position:15% line:83% size:75% hundreds of thousands of high paying, high skilled jobs 23:20.733 --> 23:24.033 align:left position:20% line:83% size:70% and affecting millions of people every day, 23:24.033 --> 23:25.433 align:left position:35% line:89% size:55% economically. 23:25.433 --> 23:29.500 align:left position:20% line:83% size:70% So we need to bridge that in a methodical manner, 23:29.500 --> 23:31.866 align:left position:10% line:89% size:80% but it's an innovative industry. 23:31.866 --> 23:33.600 align:left position:22.5% line:89% size:67.5% It's got a ton of grit. 23:33.600 --> 23:37.400 align:left position:32.5% line:83% size:57.5% And I do think through the 2100s, 23:37.400 --> 23:40.233 align:left position:30% line:83% size:60% we're gonna have a thriving place, 23:40.233 --> 23:41.700 align:left position:20% line:89% size:70% a thriving role to play. 23:41.700 --> 23:43.266 align:left position:12.5% line:89% size:77.5% - Yeah. Well, thanks for that. 23:43.266 --> 23:45.033 align:left position:25% line:89% size:65% That's nice summary. 23:45.033 --> 23:47.666 align:left position:17.5% line:83% size:72.5% Just flip the same question over your way, David. 23:47.666 --> 23:51.266 align:left position:25% line:83% size:65% - I think the energy everything bagel is right, 23:51.266 --> 23:52.433 align:left position:30% line:83% size:60% but it has to be everything bagel 23:52.433 --> 23:54.833 align:left position:27.5% line:83% size:62.5% that's essentially pollution free. 23:54.833 --> 23:56.733 align:left position:30% line:83% size:60% We're gonna go to something close to zero, 23:56.733 --> 23:58.733 align:left position:12.5% line:89% size:77.5% radical reduction in emissions. 23:58.733 --> 24:01.433 align:left position:15% line:83% size:75% So that has huge implications for the oil and gas industry, 24:01.433 --> 24:05.633 align:left position:20% line:83% size:70% which makes and delivers principally fossil fuel. 24:05.633 --> 24:06.900 align:left position:15% line:89% size:75% That then raises the question 24:06.900 --> 24:08.400 align:left position:25% line:83% size:65% of what is the future of that industry. 24:08.400 --> 24:11.300 align:left position:22.5% line:83% size:67.5% I think if the industry converts itself 24:11.300 --> 24:12.933 align:left position:35% line:83% size:55% into a carbon management business 24:12.933 --> 24:14.666 align:left position:25% line:83% size:65% where it specializes on providing useful 24:14.666 --> 24:16.333 align:left position:32.5% line:89% size:57.5% energy services 24:16.333 --> 24:18.666 align:left position:30% line:83% size:60% but in a way that radically reduces 24:18.666 --> 24:19.833 align:left position:20% line:89% size:70% carbon dioxide emissions, 24:19.833 --> 24:22.400 align:left position:17.5% line:83% size:72.5% either because you capture the carbon dioxide emissions 24:22.400 --> 24:24.000 align:left position:30% line:83% size:60% before they go up in the atmosphere, 24:24.000 --> 24:26.033 align:left position:25% line:83% size:65% because you're in the business of producing 24:26.033 --> 24:29.900 align:left position:25% line:89% size:65% and selling biofuels, 24:29.900 --> 24:31.133 align:left position:20% line:89% size:70% or you're in the business 24:31.133 --> 24:33.300 align:left position:20% line:83% size:70% of producing and selling and managing hydrogen 24:33.300 --> 24:37.333 align:left position:17.5% line:83% size:72.5% as an energy carrier, then those are all viable parts 24:37.333 --> 24:39.766 align:left position:25% line:83% size:65% of an industry of the future that build on, 24:39.766 --> 24:42.433 align:left position:20% line:83% size:70% not perfectly, but build on at least elliptically, 24:42.433 --> 24:44.733 align:left position:20% line:83% size:70% the skillset that exists inside the industry. 24:44.733 --> 24:46.266 align:left position:20% line:83% size:70% To me, what's interesting about the industry 24:46.266 --> 24:48.733 align:left position:15% line:83% size:75% is that the industry leaders right now just don't know 24:48.733 --> 24:50.166 align:left position:15% line:89% size:75% what that future looks like. 24:50.166 --> 24:52.066 align:left position:25% line:83% size:65% And so you see a lot of experimentation 24:52.066 --> 24:54.600 align:left position:22.5% line:83% size:67.5% and no clear direction, and therefore the risks 24:54.600 --> 24:58.866 align:left position:20% line:83% size:70% of not really taking the problem seriously now, 24:58.866 --> 25:00.500 align:left position:12.5% line:89% size:77.5% even though it's uncomfortable, 25:00.500 --> 25:02.233 align:left position:32.5% line:83% size:57.5% those risks are actually profound, 25:02.233 --> 25:03.633 align:left position:10% line:89% size:80% not only for their shareholders, 25:03.633 --> 25:05.000 align:left position:25% line:83% size:65% but they're profound for the communities 25:05.000 --> 25:06.500 align:left position:12.5% line:89% size:77.5% that depend on these companies 25:06.500 --> 25:10.700 align:left position:27.5% line:83% size:62.5% in various ways to be well managed. 25:11.066 --> 25:13.400 align:left position:30% line:83% size:60% - Affordable and abundant oil and gas 25:13.400 --> 25:16.066 align:left position:25% line:83% size:65% has been an economic multiplier in the US, 25:16.066 --> 25:18.700 align:left position:22.5% line:83% size:67.5% helping to support and bring back industry. 25:18.700 --> 25:21.200 align:left position:17.5% line:83% size:72.5% It's difficult to calculate how much employment 25:21.200 --> 25:23.633 align:left position:25% line:83% size:65% the industry provides since it's interconnected 25:23.633 --> 25:26.000 align:left position:12.5% line:89% size:77.5% with so many other industries. 25:26.000 --> 25:28.566 align:left position:25% line:83% size:65% Studies I found range from over a million 25:28.566 --> 25:31.166 align:left position:27.5% line:83% size:62.5% to over 10 million well paying jobs, 25:31.166 --> 25:33.533 align:left position:20% line:83% size:70% it would be very hard to transition this many workers 25:33.533 --> 25:34.733 align:left position:32.5% line:89% size:57.5% to other fields 25:34.733 --> 25:37.366 align:left position:20% line:83% size:70% and they may not want to change careers anyway. 25:37.366 --> 25:39.866 align:left position:25% line:83% size:65% We can be sure there would be pushback. 25:39.866 --> 25:41.833 align:left position:27.5% line:83% size:62.5% The industry could potentially transition 25:41.833 --> 25:43.900 align:left position:10% line:89% size:80% to lower carbon energy services, 25:43.900 --> 25:46.500 align:left position:15% line:83% size:75% but we'd still need petroleum chemical feed stocks 25:46.500 --> 25:49.133 align:left position:30% line:83% size:60% for plastics and many other materials. 25:49.133 --> 25:52.233 align:left position:17.5% line:83% size:72.5% Investors are nervous about volatility in the industry, 25:52.233 --> 25:53.533 align:left position:22.5% line:89% size:67.5% but lack of investment 25:53.533 --> 25:56.300 align:left position:27.5% line:83% size:62.5% will weaken supply and drive up price. 25:56.300 --> 25:59.366 align:left position:22.5% line:83% size:67.5% Advocates see a future for many decades to come, 25:59.366 --> 26:01.600 align:left position:30% line:83% size:60% but political and voter decisions 26:01.600 --> 26:04.900 align:left position:25% line:83% size:65% on carbon policy will partly determine that. 26:04.900 --> 26:15.233 align:left position:47.5% line:89% size:42.5% ♪ ♪ 26:15.233 --> 26:25.566 align:left position:47.5% line:89% size:42.5% ♪ ♪ 26:25.566 --> 26:35.900 align:left position:47.5% line:89% size:42.5% ♪ ♪ 26:36.466 --> 26:37.933 align:left position:27.5% line:83% size:62.5% [Announcer] Funding for "Energy Switch" 26:37.933 --> 26:39.900 align:left position:22.5% line:89% size:67.5% was provided in part by 26:39.900 --> 26:41.433 align:left position:40% line:89% size:50% Microsoft 26:41.433 --> 26:45.266 align:left position:27.5% line:83% size:62.5% and The University of Texas at Austin.